Despite its quirky approach to business, Google Inc. became a favorite among investors as the company best positioned to cash in on the digital media revolution. The Internet search giant's shares first hit the market at $85 in August 2004 and had risen nearly ninefold by late last year, turning Google into one of America's most valuable companies.

But since reaching a record $741.79 in November, Google's stock price has plunged 40%. The company, which only a few months ago could do no wrong, saw its stock slip $12.42, or nearly 3%, Tuesday to $444.60, its lowest point in nearly a year. The dive, which has wiped out more than $93 billion in shareholder wealth, reflects concerns that a slowdown in consumer spending could temper Google's stunning growth.

A prominent executive defection contributed to the sell-off Tuesday. Vice President Sheryl Sandberg, a six-year veteran who ran Google's multibillion-dollar advertising business, said she was leaving to become chief operating officer of Facebook Inc., the hot social-networking company.

"Google had this aura about it," said Anthony Valencia, media and entertainment analyst for TCW Group in Los Angeles, which sold 417,000 Google shares in the fourth quarter, bringing its holdings to 1.7 million.

"Now the shine is off Google, whether deservedly or not."

Google is being tested by a deep economic downturn for the first time. The 10-year-old company, based in Mountain View, Calif., gained steam during the dot-com bust, when corporations tightened their budgets but consumers started spending more time and money on the Web. Wall Street now worries that the online advertising market, which Google dominates, isn't as recession-proof as once thought.

The tech-heavy Nasdaq Composite Index has declined 15% this year, but consumer-oriented tech companies have fared even worse. Google's shares are down 36% in 2008. Apple Inc. has tumbled 37% on worries that consumers won't buy as many iPods or computers. E-commerce giant Amazon.com Inc. has fallen 29%.

Investor sentiment hasn't completely turned against Google. Much of Wall Street remains bullish on its long-term prospects -- just not as bullish as it once was. Analysts are reining in earnings estimates and stock-price targets, yet 31 out of 35 people who cover Google recommend buying the stock, according to Bespoke Investment Group.

At its current level, analysts said, the stock slide probably won't impede Google's plans to invest in new technologies and emerging businesses. The company is still valued at $139 billion -- down from its November peak of $232 billion -- and generated $4.2 billion in profit last year.

But the slump might exact a psychological toll. For example, the company might have to work harder to motivate employees hired in the last year who hold stock options that are currently worthless.

"This is Google's first rough patch," said John Battelle, author of "The Search: How Google and Its Rivals Rewrote the Rules of Business and Transformed Our Culture." "It will test the character of the company."

A Google spokesman declined to comment.

Analysts attribute Google's decline partly to broader economic concerns and partly to problems of its own making.

In the opening lines of "An Owner's Manual for Google Shareholders," the letter that they wrote to prospective investors in April 2004, co-founders Larry Page and Sergey Brin warned: "Google is not a conventional company. We do not intend to become one."

They pledged to sacrifice short-term financial results to pursue lofty goals and shower employees with costly perks to recruit the smartest people. The co-founders also tweaked investors by giving themselves stock with 10 times the voting power of average shareholders and vowed not to make financial forecasts.

Google has continued to push the bounds of convention. In addition to spending furiously on sophisticated computer networks and new hires, it is funding or considering expensive projects far afield from its core moneymaker of Web search, including renewable energy, wireless airwaves, undersea Internet cables and even lunar exploration.

Investors willing to overlook those eccentricities and focus on Google's business potential generally have been handsomely rewarded. And, until recently, it was considered a safe bet even in an economic slump.

No more. Economic fears have clobbered Google. Jittery investors worry that search advertising, which accounts for nearly all of its revenue, is slowing and that ambitious projects in other markets -- such as online video, mobile services and social networking -- are not paying off.

When asked about broader economic concerns at an investor conference Monday, Alan Eustace, Google's senior vice president of engineering and research, said Google had a number of factors working in its favor. But he didn't offer much reassurance.

"We'll have to see," he said.

Another investor concern: Google faces the prospect of a more formidable challenger for Web-ad dollars if Microsoft Corp. consummates its unsolicited takeover bid for Yahoo Inc. Google has complained that such a deal would hurt competition in Web services.

The search leader spooked investors in January when its 17% growth in fourth-quarter profit fell short of Wall Street's expectations. Chief Executive Eric Schmidt's reassurance that the slowing U.S. economy wasn't hurting ad spending on Google didn't help much.

Researchers have found that investors in high-growth stocks are quick to react to earnings misses, even narrow ones.

"It suddenly changes people's perceptions of the company," said Patricia Dechow, an accounting professor at UC Berkeley's Haas School of Business. "They wonder if the stock is priced too high or if the growth is gone. It can be hard for a company to regain momentum once investors change sentiment."

Shortly after the earnings report, Jay Wong, portfolio manager with Los Angeles-based Payden & Rygel, reduced the investment firm's stake in Google by an undisclosed amount, to about 50,000 shares.

"I think Google is going through a rough spot right now," Wong said. "We are just waiting for some good news to come out before we start rebuilding our position."

But in this jittery market, investors aren't giving Google the benefit of the doubt. Its shares fell nearly 5%, to $464.19, on Feb. 26 after Web measurement firm ComScore Inc. said Google users had performed 9% more searches in January than in December, yet clicked on 7% fewer ads. The research firm took the unusual step Friday of clarifying its report, attributing the drop to steps Google took to make its ads more relevant.

"This is the kind of market where you shoot first and ask questions later," said Georges Yared of Yared Investment Research, who personally owns 430 shares. "When you begin to ask the questions, you come to the conclusion that it is still one of the best business models in the world."

That's because Google still has a lot going for it.

While the company stretches its lead in search advertising, Microsoft's bid for Yahoo is distracting both of Google's rivals.

The European Union appears close to lifting the last hurdle for Google's acquisition of DoubleClick Inc., which would strengthen its position in online advertising. And Google appears unlikely to win the auction for wireless spectrum, which would have saddled the company with a multibillion-dollar bill and the hassles of running a nationwide wireless network.

Manning & Napier Advisors Inc. is buying again. After dropping its Google holdings to 245,000 shares late last year, the Fairport, N.Y.-based investment firm has already rebuilt its position -- and then some -- to more than 568,000 shares.

"Google's position is and will remain pretty formidable," said Jeff Donlon, the firm's technology equity analyst. "We have had some conversations again to think about buying some more."

Still, Google will have to do a better job of assuaging investor concerns if it wants its stock to keep going up, he said.

"There is a lot of hype around the company," Donlon said. "They can't necessarily think that that's always going to be there to support the stock."